In Morocco small- and medium-sized enterprises (SMEs) in industrial zones compose the economic backbone of the economy. A large number of industrial zones are located in vulnerable areas which poses long-term risks to their economic activity. Especially the industrial zone in AÏt Melloul, located in the southern Souss-Massa region, is one of the regions most vulnerable to climate change in Morocco. Extreme weather events such as floods, intensive rainfalls, heatwaves and droughts have become more frequent and severe. The industrial zone in AÏt Melloul is dominated by agro-businesses which are highly dependent on the agricultural value chain. 70% of the companies are agri-businesses processing regional vegetables and fruits, and fish supplied from the South harbors of Morocco. AÏt Melloul has a strategic position and became an important export hub for the region. The vegetable and fruits production of the Souss-Massa processed by the companies of AÏt Melloul represents 90% of the Moroccan export.

This vulnerable sector is most affected by floods and water scar-city in the country. Any disruption in the agro-industrial value chain will affect the business activities of many SMEs in the industrial zone. The impacts of extreme weather events on industrial areas can be direct or indirect. Direct risks could be physical damage to infrastructure and productions sites, irregularities in water and energy supply or contamination of water and soil due to flooding of storage sites of materials or hazardous waste. Indirect risks represent damages to external systems outside the control of the industrial zone such as electricity outage, supply chain disruptions, or even the relocation of SMEs following recurring floods in the industrial zone.

Together with local authorities and private sector partners, adaptation measures and new insurance solutions are being developed and linked to disaster risk management frameworks. The aim of ECA is to contribute to climate resilience of SMEs through strategically combining insurance approaches with appropriate adaptation measures, if applicable and suitable, with other risk management measures to harness important synergies and leverage spill-over effects between the different approaches.